Is Now the Time to Buy First Solar (FSLR)?

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top Solar Stock Searches in the Last Month Rank Ticker Name Searches #1 [FSLR]( First Solar Inc 37 #2 [ENPH]( Enphase Energy Inc 14 #3 [SPWR]( Sunpower Corp 3 #4 [SEDG]( Solaredge Tech 2 #5 [CSIQ]( Canadian Solar Inc 1 #ad [Navigating Market Volatility: The Alt Advantage]( Brought to you by [Eagle Financial]( [Rare 94.3% Options Win rate [Outrageous but True!]]( [Eagle Financial - Rare 94.3% Options Win rate [Outrageous but True!]]( I’ve kept quiet about my private options trading group... because with our 94.3% win rate over the first 14 months, I do NOT want this club to grow so big that it’ll be unmanageable. Who wouldn’t want to find an options trade with consistent, reliable, and dependable wins, 94.3% of the time? Especially when these trades take very little time to execute: just 10-minutes in the morning. 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However, timing is everything with these stocks, as shares of First Solar are only up 19% in the past year. So, is this the time to buy the stock? First Solar’s Business Founded in 1999, this American solar technology company has carved a unique niche as the only US-headquartered firm among the world's top ten solar manufacturers not producing in China, a very big deal politically. Its operations span the globe, with a manufacturing footprint that includes the US, India, Malaysia, and Vietnam. The company acts as a comprehensive provider of photovoltaic solar solutions, including advanced thin-film photovoltaic modules, helping it serve customers ranging from utility-scale project developers to commercial and industrial entities. First Solar segments its business into the following areas: - Modules (over 90% of total revenues) - This segment includes designing, manufacturing, and selling solar modules, which use advanced thin-film semiconductor technology to convert sunlight into electricity. - Systems (remainder of revenues) - Encompasses the development, construction, and sale of photovoltaic solar power systems that primarily utilize the modules manufactured by the company. Recently, the company reported a robust start to 2024, with first-quarter net sales of $794 million and a net income per diluted share of $2.20. While Chinese competitors struggle with oversupply, First Solar has benefited from tariffs and tax incentives built into the Inflation Reduction Act. Currently, the company holds a 78.3 GW booking backlog through 2030. [First quarter] [Source: First Solar Investor Relations Q1 2024]( Financials [Financials] Source: Stock Analysis Since the pandemic, gross profits have exploded as margins doubled from top to bottom. Cash from operations continues to climb, only held back by increased inventory for customers. First Solar holds nearly 3x as much cash as debt, with excess being put into reserves for production expansion. Valuation [Valuation] Source: Seeking Alpha As the matrix above shows, not all solar companies generate positive cash flow, let alone profits. First Solar and Enphase (ENPH) are the only two companies domiciled in the U.S., giving them higher premiums than their peers. However, they both are the only ones to generate a profit and cash save for Canadian Solar (CSIQ), a Chinese company that trades at a huge discount. Growth [Growth] Source: Seeking Alpha Revenue growth and its outlook highlight the effects of the Inflation Reduction Act and import barriers. Non-U.S. companies are seeing sales drop while First solar continues to shine. Enphase makes solar equipment, not panels, putting it in a slightly different position. Profitability [Profit] Source: Seeking Alpha Higher realized prices, demand, and improved operations have helped First Solar achieve unmatched profitability, allowing it to generate plenty of cash. Returns on assets, equity, and total capital aren’t as high as we’d like. However, those will improve as production expands. [AI-Biotech Signs $3 Billion In Big Pharma Deals]( Big Pharma is betting billions on one AI-biotech. On October 6, 2022, Eli Lilly signed a $425 million deal to have their AI-platform develop new drugs. On January 9, 2023, Bristol Myers Squibb signed a $2.7 billion deal to have them develop new drugs. That's because this small-cap has AI that's revolutionizing drug discovery. It discovered a potential new treatment for multiple myeloma... in just 4 months... [Get the name of this Bill Gates-backed small-cap here ]([Ad] Our Opinion 8/10 First Solar is our top solar pick. As the only U.S.-based solar panel manufacturer, it plays a key role in the country's growth. However, the incentives from the Inflation Reduction Act will eventually dissipate, and we don’t expect them to be renewed. Given this and the high volatility of the stock, while we like the company, we would wait for significant pullbacks to purchase shares, giving ourselves a cushion of safety. 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